1. Development of an Integrated Cost Estimation and Cost Control System for
Construction Projects by. Salman Azhar, Syed M. Ahmed and Amaury A.
Caballero.
Development of an Integrated Cost Estimation and Cost Control System for Construction Projects by Salman Azhar, Syed M. Ahmed and Amaury A. Caballero
Florida International University 10555 W. Flagler Street, Miami, Florida 33174, USA ABSTRACT Today, most of the construction companies are using computer-aided softwares for cost estimation and cost control. The cost estimation is done before the construction begins while the cost control is performed during the construction period. The organization which controls the cost could be different from the organization which prepares the cost estimate. Moreover, different softwares are available for cost estimation and cost control. This may complicate the cost control process due to inconsistencies between the cost estimation and cost control data. The purpose of this study is to develop a system which could integrate the cost estimation and cost control processes. Such integration enables the transfer of cost estimation data automatically to the cost control process. Therefore, complete information regarding the cost status of the project can be accessed at any time. Systems Analysis and Design (SAD) approach using relational database management system is used to develop the integration model. MS Access™ is used as a physical tool to implement and test the system. This paper provides a glimpse of the requirements analysis, system development and implementation stages. KEYWORDS Cost Estimation; Cost Control; Cost Integration; Cost Engineering; Construction Softwares, Data Modeling different levels of detail. This inconsistency of data results in lack of accuracy and untimely generation of cost control reports for any corrective decision making (Cagle, 1991).
1. INTRODUCTION Cost engineering consists of cost estimation and cost control. Estimation is a methodology for forecasting and predicting cost and expenditures of a future project and to produce a budget. Cost control is a process to hold expenditures within the budget by monitoring and appraisal of the cost performance (Clark and Lorenzoni, 1997).
However, if the estimation and control processes are integrated, there will be a communication of information between the two processes. The results of the cost control process can be used as a feedback to the estimation process for future projects, while a good estimate may make the control process more effective.
In most construction projects, cost estimation and cost control are performed by different people (e.g. estimation is done by quantity surveyors or estimators while cost control is the responsibility of the owner or contractor’s cost engineers) and sometimes by different organizations using different techniques and/or softwares (Kibler, 1992). Due to these reasons, the cost estimation and cost control data are usually available in different forms and at
Therefore, this study is conducted with the objective of developing an integrated cost estimation and control system which could facilitate the transfer of information between the two processes for current and future projects. The system identifies the linkages (common attributes) between the two processes and
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presents a data flow schema to implement it in the real life using any database management software such as MS Access™ or Oracle™.
After the prototype is created, its testing is conducted to determine any errors, problems and feedback for improvement.
2. METHODOLOGY
3. REQUIREMENTS ANALYSIS
Due to its inherent simplicity, systems analysis and design (SAD) approach is selected to develop the integration model and the prototype software (Whitten et al., 2001). The framework selected for this research is outlined in Figure 1, which consists of three steps with interlinked inputs and outputs.
3.1 Coding System CSI MASTERFORMAT is used for cost estimation and control coding which assigns a specific activity id to each individual activity (O’Connor, and Caraway, 1993). The activity id is divided into 4 parts: 1_id, 2_id, 3_id, and item_id representing major item, minor item, type of construction and the location. For example, activity id 03 010 020 001 shows formwork and support for concrete columns in the first floor of the building.
2.1 Requirements Analysis There are three types of requirements which were identified for developing the cost integration model. These are cost estimation software requirements, cost control software requirements and the requirements for their integration. For this purpose, the existing cost estimation and control softwares were explored to identify their vital attributes which could be used for integration. Such attributes included the cost and work activities coding system, techniques to measure different processes, and input and output formats.
3.2 Cost Estimation and Control Processes Cost estimation includes estimates for materials, labor, equipment and subcontracts. For the sake of simplicity, lump sum contract is used in this study. Therefore, the format of estimating model consists of work package cost plus markup and overhead as a percentage of total work packages cost for overall project. The cost control model is based on the earned value concept, consisting of three elements: actual cost of work performed (ACWP), budgeted cost of work performed (BCWP) and budgeted cost of work scheduled (BCWS).
2.2 Integrated Model Development The integrated model development begins by developing the individual data schemas for cost estimation and cost control parts. This is done by plotting the logical dataflow diagrams (DFD) for each part, which provided a key to integrate both parts. This process is briefly illustrated in Figure 2.
ACWP for material = total amount paid for materials in a work package ACWP for labor = total amount paid to labor for a work package ACWP for equipment = total amount paid for equipment assigned to a work package
In the next step, the data requirements of the integrated cost estimation and control processes are identified. These data requirements are then combined to prepare an integrated data model (i.e. an Entity-Relation (E-R) diagram) which serves as a basis to construct prototype software.
BCWP for material, labor or equipment = percent work progress multiplied by total cost of labor or equipment or material in a work package BCWS for material, labor or equipment = total estimated cost for labor, equipment, or material at the control time. On the basis of these parameters, cost variances and schedule variances are calculated to
2.3 System Development and Testing MS Access™ is used as commercial-of-the-shelf tool to develop prototype software using the integrated model developed in the second step. 2
card combined with the labor unit price from the estimate storage (storage no.8.0) will produce actual labor cost of work performed
determine work productivity which is used to measure the rate of work progress. 3.3 Input and Output Formats
(ALCWP), i.e. storage no.9.0.
The inputs for the system are the quantities of work packages, unit prices, work schedule and the daily progress data. The output will be cost estimates and cost control reports for overall or any specific part of the project.
The material card is used to assess the amount of material used for each work package on site. The material card combined with the material unit price from the estimate storage (storage no. 8.0) will produce an actual material cost of work performed (AMCWP), storage no. 10.0.
4. MODEL DEVLOPMENT
Actual equipment cost is similarly calculated from the equipment time card data which is collected from the site combined with the equipment unit price from the estimate storage (storage no. 8.0). However, the equipment idle cost should also be considered by calculating the type of equipment which is not used on that day (storage no.23). The cost of idle equipment will not be used directly in the work package, but it will be added in the calculations of cost variance for total project cost.
4.1 Dataflow Diagrams One basic requirement in the integrated cost estimation and cost control model is that the estimation data should be automatically transferred to the control part. Keeping this condition in mind, the logical data flow diagrams for both parts are designed. The logical dataflow diagram depicts how the system behaves without any physical implementation and provides a great tool in developing an information system.
The ACWP of material, labor, and equipment will be used to find respective cost variances for each work package performed. This task can be achieved by combining the ACWP for material, labor, and equipment with the budgeted cost of work performed (storage no. 12, 13, and 14). The budgeted cost of work performed can be calculated by combining the quantity of work done and the unit price of material, labor and equipment from the estimate storage (process no. 11).
Figure 3 illustrates the dataflow diagram (DFD) for estimation part. The 3-D rectangular boxes show the external agents which interacts with the system and provide necessary inputs. These inputs are then passed to different processes labeled in the logical order. Each process is linked with a certain database to store and/or retrieve the information. The most important process in the estimation DFD is process no. 3 which prepares the cost estimation sheet for material, labor, equipment and subcontracts. This estimation sheet which is developed before the construction stage of the project life cycle is used during the construction stage as a reference of cost. Therefore, the estimation sheet is combined with the project scheduling in order to track down the costs on daily basis.
Finally, the cost variance for complete project can be found by combining the equipment idle cost (storage no.23) with the cumulative of cost variance for material, labor and equipment for the total work package done (storage no. 15, 16, and 17). The cost variance for total project is represented as process no. 18 in Figure 4.
Similarly, figure 4 shows the DFD for the cost control part. The major input is coming from the process no. 3 (i.e. estimation sheet) which is linked to the process no. 7 to map estimation part with the project schedule. The labor time card is used to assess the actual work of an employee for a work package. The labor time
For the purpose of using the cost control data for future projects, a database of labor and equipment productivity is developed. The labor productivity (process no.20) can be assessed from the actual labor cost of work performed storage (storage no. 9) multiplied with the
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relational database management system in Microsoft Access. Such integration enables the transfer of cost estimation data automatically to the cost control process. Therefore, complete information regarding the cost status of the project can be accessed at any time. The system provides different tools for controlling the project cost such as productivity data of equipment & labor, and materials waste data. Such information can enable the management to take preventive actions to control the total project costs. The productivity and materials waste data can also be used to prepare estimates for future projects.
quantity done, and labor unit price from the estimate storage (storage no. 8.0). The productivity of equipment (process no. 21) can be assessed in the same way as labor. The material waste is also considered for the future project estimation. The material waste could help the future estimator to estimate the waste of materials for a certain work package more accurately. The material waste (process no. 22) can be assessed from the actual material cost of work performed (storage no. 10) combined with quantity take off, material unit price, and conversion of material unit from the estimate data stored in estimate storage (storage no. 8.0)
7. RECOMMENDATIONS 4.2 Data Model The integrated cost estimation and control system in this study is designed for lump sum contract projects. There is a need to extend it for different contract types and enhance its usability for multitasks environment.
Based on the data needs as ascertained in the DFD’s, a data model is prepared using the relation database concept as shown in Figure 5. The data model is normalized to the 3rd degree to increase the processing speed of the prototype software.
8. ACKNOWLEDGEMENT The fundamental concept of this study is taken from the class lecture notes (Information Technology in Construction) of Dr. Chotchai
5. SYSTEM DEVELOPMENT AND TESTING Among the different commercial off-the-shelf softwares, MS Access™ is selected due to its user friendliness, cheap cost and easy availability. As a first step in prototype software development, data Tables are designed for material, labor, equipment, subcontracts and work progress. This was followed by Query design to establish the relations between different entities. Each process (as shown in Figures 3-4) is interpreted in the form of Macros and finally Forms are designed to get input and generate reports.
Charoenngam, Associate Professor, Asian Institute of Technology, Bangkok, Thailand. 9. REFERENCES Cagle, R. F., 1991. Implementing an Owner’s Cost Control System, AACE Transactions, O.7. Kibler, B. E., 1992. Integrated Cost and Schedule Control: a piece of cake, Cost Engineering, Vol. 34, No. 7 Lorenzoni, D.C., and Clark, F.D., 1997. Applied Cost Engineering, 3rd edition, Marcel Dekker, Inc., USA.
After development, the prototype software is tested on a number of projects to identify any errors and deficiencies (the software results are compared with the manual calculations). This process is repeated until no significant problems are found.
O’Connor, J.T., Caraway, P.H., 1993. Need for Specification Format That Accommodated Engineered Projects, Journal of Construction Engineering and Management, Vol.119, No.4
6. CONCLUSIONS
Whitten, L.J.; Bentley, L.D.; and Dittman, K.C., 2001. Systems Analysis and Design Methods, McGraw-Hill Higher Education, USA.
The purpose of integrating the cost estimation and cost control is achieved by using the 4
INPUT
PROCESS
OUTPUT
Data Flow Diagram & Data Dictionary
Data
Data
Data Flow Diagram & Data Dictionary
Cost
1. Current Practices of cost estimation and cost control
Control
Requirements analysis
OUTPUT 1
Cost Relational Schema Diagram
DATABASE DESIGNED
DATABASE DESIGNED
Relational Schema Diagram
Software
2. Cost estima tion tables
Important attributes of integration
Entity Relationship Diagram
3. Cost control tables
OUTPUT 1
Output 2
System Development and Testing
Integration of Cost Estimation and Cost Control
Feedback for Improvement
Revision and Enhancement
Figure 1. Basic framework to develop an integrated cost estimation and control system Standard Format
1.0 Project Documents
1.0 Standard Format
Generate Work Item List
Project Informa tion
2.0
Project Information
3.0
Work Item List
Work Item
2.0 Quantity Takeoff
Project Documents
Formula
4.0
Run Extension
Subcontractors
Formula
Quantifie d Work Ite ms
3.0 Project Client
Bid
Price Data
5.0
Price List
Price Data Document
Price Data
Bid
4.0 Co nstsru ction Co st
Add General Overhead
Suppliers 6.0
General Overheads General Overheads
5.0
Estimate Management
Ne t Costs Ma rkups
Add Markups 7.0
Markups
6.0 Total Project Co sts
Entity Relationship Diagram
Figure 2. Integrated cost estimation and cost control model development concept
OUTPUT 2 Integration of Cost Estimation and Cost Control Tables
Model Development 1. Design of database 2. Construction of prototype
Estimate Software
Prepare Reports
Bid
Figure 3. Data flow diagram for cost estimation 5
3.0
7.0
Run Estension (From Fig. 5.1)
Add Schedule
Add Schedule
1 11.0
BECWP per WorkPackage BMCWP per 13 WorkPackage BLCWP per 14 WorkPackage 15.0 12
Labor CV per WorkPackage
15
address
OT Rate
city
18 18.0
AECWP per WorkPackage
Equip Idle Cost
Equipment Time Card
proj id date
21
counter M
counter OT OT Hour
Use Equip. Unit Cost
BCWS Total
20.0
11
AECWP per WorkPackage
10
AMCWP per WorkPackage
Material Waste
No
EQUIP TIME CARD
proj id
Controlled
counter A counter OT
emp name
MATRL m CC 1
break into
1
1
OT Hour
counter M
Controlled proj id
1
date mat id
1
1
1
EST_ITEM
m
break into
1
PROJECT
counter
14.0
labcost
qty
level1id
counter
proj-id
matcost
tkoff unit
level2id
wbs1-8
proj name
subcost
itemcost
level3id
equcost
proj-id
item id
Labor Productiv.
Labor& Equip Productivity
1
BCWS Total
location architct
miscost
21.0
Data
Controlled
1
emp name
Use Equip. Unit Cost
counter A
ALCWP per WorkPackage
OT Rate
m
date
Calculate Equip. Idle Cost
Equip. Idle Cost
SV Total Project
9.0
No.
ST Rate
m
LABOR TIME CARD
AECWP
23.
12.0 BCWP Total
used in
m
13.0
BCWP Total
idle rate
Material Card
10.0 11
19
type
function
Use Material Unit Cost
CV Total Project 19.0 SV Total Project
1
unit price
break into
AMCWP
CV Total Project
23
1
mat
used in
craft
m
Equip. CV per WorkPackage
Process
ST Rate
equip no equip name
mat_id
m
use Labor Unit Cost
AMCWP per WorkPackage
10.
22
empl name
9.0
CV Equip
17
empl no
postal code Hire Date
21 equip list cc
break into
Labor Time Card
Material CV per WorkPackage
16
country
mat data cc
1
region
ALCWP
17.0
20
Quantity Work Done Progress
8.0
ALCWP per WorkPackage
9.0
CV Mtrl
work in
BLCWP BMCWP BECWP
CV Labor
16.0
21 labor list cc
Estimate + Schedule
8.0
formula id
item des enginr
const cost net cost ttl proj cost owner id
Equipmen Productiv.
Figure 5. Data model for integrated cost estimation and cost control system
22.0 Material Waste
Store
Old
New
Figure 4. Dataflow diagram for cost control
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